Which of the following is both a supply-side and a fiscal policy tool during a r
ID: 1217606 • Letter: W
Question
Which of the following is both a supply-side and a fiscal policy tool during a recession? Deregulation. Tax cuts Welfare programs Liiberalized immigration laws. When the Fed buys securities through open-market operations, the equation of exchange (under monetarist assumptions about V) requires that either aggregate spending: Increases or prices decrease, or both. Decreases or prices increase, or both. Or prices decrease, or both. Or prices increase, or both. Deposit creation occurs when. A bank lends money. A person takes money out of one bank and puts K in another bank. A bank borrows dollars from the Federal Reserve. AII of the above. Suppose a banking system has a required reserve ratio of 0. 10. How much can the money supply increase in response to a S500 million increase in excess reserves for the whole banking system? S50 million. $500 million. S5 billion. S4.5 million. The money supply curve is: Vertical since it's not determined by the interest rate. Horizontal since it's not determined by the interest rate. Upward sloping to the right. Downward sloping to the right.Explanation / Answer
Answer 23:
Option B. It is both a fiscal policy to increase aggregate demand and also supply side policy to increase aggregate supply during recession.
Answer 24:
With the purchase of securities the money supply in the economy will rise. According to equation of exchange :
M V = P Q where V is constant. Thus any increase in M should be matched by increase in P or increase in Q. Thus option D.
Answer 25:
Option A. Deposit creation occurs when bank lends money. Deposit creation is the maximum amount of money that banks can create given a quantity of reserves.
Answer 26:
Option C. Excess reserves / RRR = 500 / .10 = $ 5 billion
Answer 27:
Option A.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.